It 's the business buzzword that 's helping to change the global economy : Start-up . But in Berlin , the start-up world is still shaping up .

Simon Schaefer is the founder of Factory , a 16,000-square-meter co-working space in Berlin designed to cultivate entrepreneurship . Factory allows small start-ups to work on the same campus as more established tech companies , providing a `` playground for entrepreneurs and innovators . ''

CNN spoke with Schaefer to find out how Factory is facilitating start-ups and the burgeoning Berlin tech scene .

CNN : How many start-ups are currently working at Factory ?

Simon Schaefer : Right now we have about 25 companies here on the premises . The big and important difference between other work spaces and us is that we 're stage agnostic so we have later-stage companies or established companies like Mozilla , local heroes like Soundcloud or Wunderkinder , which are role models for younger founders to look up to .

CNN : How does Berlin 's start-up environment compare to the likes of Silicon Valley ?

SS : If you compare Berlin to other ecosystems , it 's very early stage . And it needs time the most , and collective know-how . And getting companies from different stages and having them work with each other is much , much easier with proximity and bringing people together in one place .

CNN : What advice do you have for others who are starting a business ?

SS : I think what you should do is look at the individual stages of development of the company . If you 're an angel or seed-stage , it 's rather simple . You get feedback on your product and you get the chance to test your ideas with your peers . If you 're in a later stage company , I think you quickly realize that growth changes you .

And so I think not only do the founders of those companies invest and engage with early-stage companies , but also they still have to touch base with what they were like a few years ago . I think it 's always important to have that visually in front of you , to be aware of what it really means to be a small , flexible team .

CNN : Why did you choose to invest in start-ups ?

SS : Quite frankly -LSB- Factory is -RSB- a $ 22 million -LRB- $ 28 million -RRB- investment and it 's entirely brought together by five individuals . If you look at real estate as a business , start-ups are probably your worst clients . Because if it works really well , they outgrow the space quickly . And if it does n't work at all , you 'll hear from them when there 's a lot of rent left to be paid . So it was very difficult to create a concept around the dynamism of start-up culture .

And I think we 've succeeded by being very flexible and having short-term and long-term spaces for their individual stages .

There 's a lot of interesting momentum in Berlin and we 're trying to capture that in one place . So for anyone who wants to be part of that movement , it would make sense to be here .

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Berlin is vying with London to be capital of Europe 's start-up scene

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Factory has 24 companies in its space , including global players like Soundcloud

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The large co-working space is supported by Google and KPMG